Dave Says: Co-Signer Passed Away

Dear Dave,

My father co-signed for my niece's student loans, and recently he passed away. My mom didn't sign for the loans, but would she be held responsible now?

Denise

Dear Denise,

I'm really sorry to hear about your dad. But no, your mom is not on the hook for the loans. Your dad's estate could be held responsible though.

When you die, what you own stands good for what you owe. So anything he owned—perhaps his and your mother's home—would have to stand good for it. This means that while your mom isn't liable, the student loan would have to be cleared as if it were a normal debt in order for your mom to keep, free and clear, any of the stuff your dad owned.

Dave